Does anyone do a IO loan with offset account??

[rugrat]

Can anyone help me? I am looking for any lenders who actually offer an IO loan with an offset account (preferrably 100%, but any variation). So far everyone I have spoken to says that they don't do it and don't know anyone who does - but I was under the impression that some of the members here had this set up? Of course they could be old products.

So, does anyone know of a lender who offers IO with and offset?

 

[Rolf Latham]

Almost all mainstream lenders offer them, WBC, ANZ, CBA NAB, STG etc

Some of the products are better than others, while some may not be suitable even though they may look ok on the surface.

ta
rolf

 

[auror]

I have one with WBC. 100% offset with IO (5 year term)

 

[Rob Williams]

Hey Rugrat, are you sure you're not mixing metaphors? Nearly all lenders offer an offset account with an IO loan. What they don't offer is an offset account with a fixed IO loan. Very few do that.
Maybe when you ask the question, they are assuming, for some reason, that you want a fixed IO loan, in which case their answer will be "no".
Just a thought .. I can't think of any other reason why you would get the idea that you couldn't get a 100% offset with an IO loan.

 

[wylie]

We are with Westpac and have had our transaction account offset against our rocket repay housing loan for several years. Just last week, we repaid the housing loan down to zero and immediately redrew on the loan for rates in advance, and our interest in advance will be debited to that account. Basically, we kept the loan facility, asked for the loan "type" to change from "housing loan" to "IO investment loan" and will use it for expenses for the investment houses.

Our broker put in a request at least a week ago that this housing loan be changed to an IO investment loan and he has also requested that the transaction account be offset against another one of our IO investment loans. We have some fixed loans and some variable, and I am fairly sure he said it will be offset against one of the variable loans.

So my understanding is that when Westpac process his requests, our offset account will be offset against an IO variable investment loan.

Just this morning I checked, and the loan designation has not changed, and the housing loan is still called a housing loan, but he did say that it would take up to two weeks to be changed.

 

[Rolf Latham]

Rob

On that basis, Adelaide bank, CUA and the Rock Building society are the 3 main providers of fixed rate IO and 100 % offset last time I looked

ta
rolf

 

[Rob Williams]

Rob

On that basis, Adelaide bank, CUA and the Rock Building society are the 3 main providers of fixed rate IO and 100 % offset last time I looked

ta
rolf

That's handy to know. Will save some legwork if anyone is looking for that option. Thanks.

 

[rugrat]

Thanks for that! I didn't think I was going crazy in thinking they existed! Maybe I am just talking to the wrong people who don't know what they are talking about. Oh well, I might go have a chat with my mortgage broker.

 

[Pushka]

We have a NAB IO offset, variable though!

 

[xcesiv]

CBA have an offset Fixed Interest only account, but the offset is only 1.5% of the funds in the offset account.

alomost not worth it.

 

[sash]

Yes, I have a fixed rate 100% offsets (2) with Adelaide Bank.

Their rates are similar to the big four....their service seems to be better.

They still have fees on their loan products.

cheers
sash

 

[joanmc]

I have an ANZ 1 year fixed IO with 100% offset against it (might be low doc too , can't remember) they only offer the offset against 1 year fixed though.

 

[ThomasAJ]

I have read the prior posts but still not clear on how IO and Offset works.

I was told that with Principle and Interest loans when there is money in the Offset acc the principle is reduced but the monthly payments must remain the same.

I presume with IO and Offset the monthly payment is reduced as the priciple is not.

 

[Rolf Latham]

Hiya Thomas

Thats correct, though you have to make proper enquiries as some lenders do treat the IO offset in the same way as others treat PI Loans

ta
rolf

 

[xcesiv]

I have read the prior posts but still not clear on how IO and Offset works.

I was told that with Principle and Interest loans when there is money in the Offset acc the principle is reduced but the monthly payments must remain the same.

I presume with IO and Offset the monthly payment is reduced as the priciple is not.

You are right.

The funds in the offset account are deducted from the principle to calculate the amount of interest charged.

The Principle remains the same and the interest charged is reduced.

 

[DebtEquity]

What are the charges for setting up the Offset Account with full transaction rights.

There is always a cost! who is the cheapest!

 

[Qlds007]

Not always a cost.

Some of the majors offer it free as part of their Pro Pack benefits.

 

[Pushka]

No cost with NAB, all part of a package.

 

[LynnH]

Likewise with WBC - part of the annual package fee.

Cheers
Lynn